Britvic has cooled talk of an imminent merger with AG Barr after the Competition Commission gave the provisional go-ahead for the move yesterday.
In a statement, Britvic chairman Gerald Corbett said: “Our company is in a different place to last summer when the terms of the merger were agreed.
“The cost savings from merging are less, we are performing better, we have new management and we have a new strategy to deliver good growth internationally as well as in the UK. These are among the issues the board will reflect on in August once the Competition Commission’s conclusions are known, in order to ensure that it acts in the best interests of Britvic’s shareholders.”
Analyst Nicola Mallard of Investec said Corbett’s comments “probably reduce the likelihood of a deal this time round”. “We see the probability of both parties agreeing a deal as reduced. We originally suggested 65%, but now reduce this to 50%.”
The deadline for final clearance is July 30 and no merger can be formally announced prior to that date.
The Competition Commission yesterday ruled that customers “will not lose out” from the merged Barr/Britvic. “Most consumers tend to see Barr and Britvic brands as distinct products rather than as close substitutes for each other. Looking at consumer preferences and other evidence, we were able to conclude that the proposed merger was unlikely to substantially lessen competition.”
